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Asset Detail > Depreciation tab
Show all hidden content
Use the Depreciation tab in the
Asset Detail window
to enter or edit detailed depreciation information for the selected asset.To open this tab, select
Add
or Modify
on the Asset List window then select the Depreciation tab on the Asset Detail window.note
The application assumes that any date after 12/31/29 is in the 1900s and any date before 01/01/30 is in the 2000s.
Treatments
For a new client, the Tax, Book, AMT, and ACE (1120) columns display on the Depreciation tab. The ACE column is not available for 1040 clients.
- For more information, see Treatments that calculate by default for each entity type.
- For details on making the E&P treatment and/or custom treatment columns available for data entry, see Setting up treatments.
- By default, amounts you enter in the Tax column are automatically duplicated in the state column (except for a section 179 expense). You can change the amounts in the state column if you need to enter special depreciation data for a state. (To change the default setting that causes the Tax column to be duplicated in the state column, selectSetupthenTreatments, highlight the state treatment, selectOptionsthen selectContinue. On the New Asset Defaults tab, clear the checkboxes for any amounts that should not default to the value that is entered for the tax treatment.
Fields & buttons
Edit Components button
Select to open the Components for Aggregate Asset window. You can use this window to edit, add or delete a component asset, or to edit the aggregate asset.
note
This button is available only for aggregate or component assets.
Treatment column headings
Select any treatment column heading (for example, Tax, Book, or AMT) to view how the current asset's depreciation was calculated for that treatment.
note
The treatment column heading displays in blue if the mid-quarter convention applies to an asset for a specific treatment.
Cost / Basis
Enter the cost basis for the asset. For an asset with a negative basis, enter the amount then press the minus (-) key.
Method/Life Wizard button
Select to open the Method/Life Wizard, which provides a list of asset classes. The Method/Life Wizard completes the methods and lives for the asset based on the class you select and the date the asset was placed in service.
note
In the Asset Detail window, press F6 to open the Method/Life Wizard's list of asset classes.
For more information, see Overview of the Method/Life Wizard.
Method
Select the method of depreciation. This dropdown displays the allowable depreciation methods, including old-law methods for all assets.
Life
Based on the selected method, the allowable lives for MACRS/ACRS assets are listed in the dropdown. For old-law assets, you must enter the life directly in this field.
ADS Life
- For MACRS assets using the Alternative Depreciation System (ADS), enter the ADR midpoint life in this field.
- For ACRS SL assets using the optional straight line, enter the life in years in this field.
This life is used to calculate AMT, E&P, and ACE depreciation amounts where applicable.
Sec 179 Expense
For ACRS and MACRS assets, enter the section 179 amount expensed. The application notifies you if an asset causes the current maximum section 179 amount to be exceeded.
If you enter a section 179 expense for a luxury car that exceeds the luxury auto depreciation limit, the section 179 expense amount is limited to the current year's luxury auto depreciation limit.
note
Press F11 to calculate and enter the maximum section 179 expense allowed for the selected asset.
Start-up/Org Exp
Enter the start-up or organizational amount expensed. The application notifies you if your entry causes the client to exceed the maximum start-up or organizational amount allowed.
note
The
Start-up/Org Exp
field is available for an asset only if one of the following asset classes was selected from the Method/Life Wizard for the asset:- Intangible asset (IRS Code Sec 195 - start-up expenses)
- Intangible asset (IRS Code Sec 248 - organizational expenses (1120, 990))
- Intangible asset (IRS Code Sec 709 - organizational expenses (1065 only))
PA IDC
Enter the Pennsylvania intangible drilling cost and development cost amount expensed. The application notifies you if your entry causes the client to exceed the maximum intangible drilling or development cost allowed.
note
The
PA IDC
field is available for an asset only if the following are true:- Pennsylvania was added as a state treatment.
- The tax year begins after December 31, 2013.
- The asset was placed in service in 2014 or later.
- The Intangible asset (IRS Code Sec 263 – Intangible Drilling Costs) or Intangible asset (IRS Code Sec 59(e) – Intangible Drilling Costs) asset class was selected.
Salvage Value
Enter the asset's salvage value, if any.
note
This field is available only when the following methods are used for depreciation: Straight Line, 125% DB, 150% DB, 200% DB, Amortization, or ACRS SL.
Credit/Amount
- Select the credit code for assets purchased after December 31, 1982 from the dropdown then enter a credit amount. If you do not enter a credit amount, the credit amount is automatically calculated for post-1982 assets based on the credit code you entered.
- For pre-1983 assets, enter the full amount of the credit taken for the asset.
- Credit codes C, S, G and F are available for assets placed in service after 1998. The credit amount is automatically calculated for each credit code.
- Credit code R is available for assets placed in service after 1998 and before 2018. The credit amount is automatically calculated for each credit code.
- Credit code Q is available for assets placed in service after 1998 and before 2007.
- Credit code A is available for assets placed in service after 2005 and before 2021.
- Credit code N is available for assets placed in service after 2008.
- Credit code M for Form 8936 expired after 2021 but can still be taken if the vehicle was placed in service in 2022.
- Credit code V is available for assets placed in service after 2005 and before 2033.
- Credit code W is available for assets placed in service after 2008 and before 2012.
- Credit code P is available for assets placed in service after February 17, 2009.
- Credit code L is available for assets placed in service after February 17, 2009 and before 2014.
- Credit code I is available for Hawaii assets placed in service between January 1, 1999 and April 30, 2009, or after 2009. This code should be entered only in the HI treatment column.
- Credit code U is available for assets placed in service after 2018.
- Credit code Y is available for assets placed in service 2020.
Prior Depreciation
When you add an existing asset, enter the amount of the asset's accumulated depreciation or cost recovered.
Select
Tasks
Prior Depreciation Comparison
to automatically calculate this amount.If a section 179 expense or an additional first-year depreciation was taken, include the amount in this field and in the
Sec 179 Expense
field.note
- The amount in this field is automatically updated when you close to a new fiscal year.
- You cannot enter an amount that is larger than the asset's basis.
Current Depreciation
Do not enter an amount in this field unless you want to force a depreciation amount. When you exit the Asset Detail window, the asset's applicable depreciation for the current period is automatically calculated and displayed in this field. This field includes the section 179 and bonus depreciation expense amounts in the asset's first year.
Regardless of whether the correct depreciation was taken in prior years, the application calculates the correct current depreciation according to the method you specify. If you select the MACRS accelerated depreciation based on formulas rather than IRS tables, the current depreciation depends on the amount of the prior deprecation taken.
If an incorrect depreciation was taken in a prior year, the application does not adjust the current depreciation so that the ending accumulated depreciation is correct.
YTD Depreciation
This row of fields displays only for quarterly or monthly clients.
- When adding information for a newly purchased asset, leave this field blank.
- When adding information for an existing asset part way through the year for a monthly or quarterly client, enter the year-to-date accumulated depreciation amount through the end of the prior period.
Total Depreciation
Shows the accumulated depreciation for the current asset. This value is calculated by the application.
Net Book Value
The net book value is automatically calculated. The application subtracts any prior depreciation and the current year's depreciation from the cost or basis and displays the amount in this field.